Tools for saving: Using prepaid accounts to set aside funds

SEP 29, 2016

We present the results of a large field study exploring
consumers’ use of the Reserve “set
aside” feature on the American Express Serve prepaid card. The study aimed to address two key questions:
1) Can certain strategies encourage consumer saving behavior; and 2) Is saving
behavior associated with better outcomes for consumers, particularly for
low-income and underserved consumers?

The results emerging from this pilot suggest that
incentivizing prepaid card customers to save, and providing an opportunity for
them to do so using a savings feature that keeps funds dedicated for saving
separate from those used for spending, could provide tangible financial
benefits. Consumers in this pilot demonstrated a willingness to take up the
savings feature, indicating interest in alternative savings vehicles, and some
customers also reported actual changes in their financial behavior.